Digital Watchdog Unleashed Against US Tech Giants

Stan Ward

January 26, 2016

Continuing the EU’s assault on US tech giants, Isabelle Falque-Pierrotin of France has assumed the role of pitbull in the digital arena where Margrethe Vestager of Denmark, once dogged the American behemoths on monopolistic grounds. Unlike EU cyber sleuth Vestager, Falque-Pierrotin is charged with monitoring how firms such as Facebook and Google handle the billions of digital bits of personal data routinely collected on Europeans by US companies, and has been at it for nearly five years.

Enjoying the empowerment of Europe’s highest court, her attempts to throttle the US tech titans will come into sharper focus soon, as the EU grapples with methods to turn the tide against the companies’ practices regarding data transfers. Rebuking them, she said,

“American companies do not have an immediate right to collect data on our citizens. If they are on our soil, then they need to live with the consequences.”

Terse language like this seems only to embolden the US firms, and validates their belief that they are being targeted by the EU simply for being foreign firms – specifically American ones.

The impetus for Falque- Pierrotin’s renewed scrutiny is the expiration this fall of the 15-year-old “safe harbor” pact which had allowed companies to move information freely between the United States and Europe, and the recent EU judges’ ruling that European data is not adequately protected when transferred to the US. As a result, Europe and the US are at an impasse regarding how American intelligence agencies monitor Europeans’ digital profiles. The stakes in this fractious fracas are large, as many US companies such as General Electric and Pfizer, representing billions of dollars of trade between two of the world’s largest economies, routinely move customer and employee data between regions and continents.

But the likely monetary outcome is greatest among tech firms such as Google and Facebook, whose ad revenues are dependent on the free flow of the valuable information from social media posts, search questions, and online purchases. This movement is easier in the laid-back, free-wheeling economy of the US, as opposed to the more buttoned- down atmosphere in Europe. By virtue of her position, Falque-Pierrotin is in the driver’s seat. She and Europe’s other privacy watchdogs can decide whether any new agreement meets Europe’s more stringent standards. If the American companies don’t play ball, she could impose further restrictions on how data is transferred across the Atlantic.

Google, for one, finds itself in the uncomfortable spot of being in European regulators’ crosshairs yet again. It will probably be fined as an outgrowth of the notorious “right to be forgotten” ruling, but the potential pittance it will pay for misinterpreting that decree will pale in comparison to the financial fallout of a negative digital privacy rap. At present, they are tussling over the former matter, with Google maintaining that it should only erase links in the French domain, while Europe argues that links should be removed across the board worldwide. It would seem, however, that Ms. Falque- Pierrotin is holding the high hand in this high-stakes poker game.

The US Commerce Department, while backing its member firms, contends that they have yielded to Europe’s privacy concerns. Bruce Andrews, the deputy secretary said,

“We’ve agreed to make major changes. The U.S. takes individuals’ privacy very seriously.”

But Falque-Pierrotin remains unmoved, which is a tenuous situation for the US as she could impose grave sanctions against American companies. When asked to comment on the status of the relationship with the giant across the pond, she said,

“Does the US provide sufficient privacy guarantees? Until now, the answer is no.”

This is not what the US wants to hear at a time when some of its biggest and most profitable firms are under the gun and operating with little leverage.